Delhivery Limited IPO
(i) Business Model of Delhivery IPO
1. They operate an asset light business model, leasing all of its logistics facilities. However, pursuant to the FedEx Asset Purchase Agreement which came into effect on December 5, 2021, ownership of nine facilities aggregating 12,671 sq. ft. is in the process of being transferred from FedEx to Delhivery.
2. Delhivery is mainly investing in technology, comprising investments in the team and other infrastructure relating to data intelligence, proprietary logistics operating system, cyber security, hardware, software and cloud infrastructure.
3. They provide a full range of logistics services, including express parcel delivery, heavy goods delivery, PTL freight, TL freight, warehousing, supply chain solutions, cross-border express and freight services and supply chain software, along with value added services such as e-commerce return services, payment collection and processing, installation and assembly services and fraud detection
4. Delhivery has engaged over 11,000 contractors and network partners across various first mile, middle mile and last mile services and 33,836 last mile delivery agents in the month of December 2021.
5. They have also deployed 36,956 contracted workers who were active in the operations (excluding daily wage manpower, security guards).
6. 99.52% of the total trucks and other transportation vehicles were leased from third-party fleet partners. So, they don’t own these vehicles.
7. They operate a pan-India network and provide the services in 17,488 postal index number (“PIN”) codes, as of December 31, 2021.
(ii) Risk in the business
1. They are totally dependent upon third party network providers for transferring parcels from one destination to another.
2. The entire cost of purchasing, maintaining, servicing lies in the head of third party provider. In 2016, vehicle manufacturers were agreed to comply with BS-VI norms, therefore, the third party providers have to purchase new vehicles which will increase the cost and if they are not capable of doing it, Delhivery may loose these network partners.
3. Logistic is a very low moat business and highly competitive.
(iii) Delhivery is the largest and fastest growing fully-integrated player in India by revenue in Fiscal 2021. Delhivery aim to build the operating system for commerce, through a combination of world-class infrastructure, logistics operations of the highest quality and cutting-edge engineering and technology capabilities.
(iv) Delhivery mission is to enable customers to operate flexible, reliable and resilient supply chains at the lowest costs. Delhivery provides supply chain solutions to a diverse base of over 21000 active customers such as e-commerce marketplaces, direct-to-consumer e-tailers and enterprises and SMEs across several verticals such as FMCG, consumer durables, consumer electronics, lifestyle, retail, automotive and manufacturing.
(v) This is achieved through high-quality logistics infrastructure and network engineering, a vast network of domestic and global partners and significant investments in automation, all of which are orchestrated by its self-developed logistics operating system that drive network synergies within and across its services and enhance their value proposition to customers.
— SHIPPING SERVICES
- Same-day/Next-day Delivery
- Time-defined/Slot-based Delivery
- Person Specific/Address Specific Delivery
- Returns Management
— SPECIAL SERVICES
- Product Replacement/Exchange Services
- Large/Oversize Order Delivery
- High-value Product Delivery
- HAZMAT/Dangerous Goods Delivery
— TECHNOLOGY SERVICES
- Real-time Monitoring and Control
- Consignee Address Validation
- Fraud Detection
- Flexible Payment on Delivery
1. Rapid growth, scale, and synergies across business lines
2. Proprietary logistics technology systems
3. Data intelligence capabilities
4. An integrated portfolio of logistics services
5. Asset-light business model enabling rapid scale up
6. An experienced and entrepreneurial team from diverse backgrounds
Objects of the Delhivery Limited IPO:
Delhivery Limited IPO Details:
|Open Date:||May 11 2022|
|Close Date:||May 13 2022|
|Face Value:||₹ 1 Per Equity Share|
|Issue Type:||Book Built Issue|
|Issue Size:||5,235 Cr.|
|Lot Size:||30 Shares|
|Issue Price:||₹ 462-487 Per Equity Share|
|Listing Date:||May 24 2022|
Promoters And Management:
Financials of Delhivery Limited IPO:
|Particulars (In Cr.)||Jun-21||2021||2020||2019|
|Freight, Handling & Servicing Cost||868||2,778||2,184||1,251|
|Purchases of Stock-In-Trade||162||10||6||0|
|Change in Inventory||-6||0||0||0|
|Employees Benefit Expense||206||611||491||345|
|Fair Value P&L on Financial Liabilities||32||9||0||1,481|
|Profit Before Tax||-130||-416||-269||-1,783|
Comparison With Peers:
|Name of the Company||Face Value||EPS||PE||RoNW||Book Value||Sales (In Cr.)||PAT (In Cr.)||M.cap (in Cr.)|
|Delhivery Pvt Ltd||1||-8.05||-||-14.66%||54.79||3,647||-416||36,000|
|Blue Dart Express Ltd||10||141||44.2||21.40%||286||3,288||102||16,712|
|TCI Express Ltd||2||35.2||48.7||25.80%||126||844||101||7,141|
|Mahindra Logistics Ltd||10||5.22||91.1||5.39%||79||3,264||30||3,654|